Energy Prospectus

Working gas in storage was 1,446 Bcf as of Friday, March 16, 2018, according to EIA estimates. This represents a net decrease of 86 Bcf from the previous week. Stocks were 667 Bcf less than last year at this time and 329 Bcf below the five-year average of 1,775 Bcf. At 1,446 Bcf, total working gas is within the five-year historical range.

We should get two more large draws from storage (above the 5-year average) before the winter heating season officially ends on March 31st. On March 31st storage should more than 700 Bcf below where it was a year ago. That will add 3 Bcf per day of additional demand April 1 to October 31 to refill storage.

I think we get at lease one draw from storage in early April, which should take storage below 1,300 Bcf. On March 31, 2017 storage was 2,051 Bcf.

Over the last 52 weeks the delta to the 5-year average of gas going in and out of storage is a -743 Bcf.

In a "normal world" this would tell us that we have a shortage of gas (demand exceeds supply), but EIA keeps telling the market that a HUGE surplus of gas is just around the corner.

Low natural gas prices are fantastic for the U.S. economy and the U.S. petrochemical business. Consumers enjoy the low cost of the space heating fuel and the low cost of electricity.

For upstream companies, higher NGLs prices are offsetting the low natural gas prices. In my opinion, the "right price" for natural gas is over $3.00/MMBtu but I doubt we see that anytime soon unless:
1. The storage refill season starts off slow
2. EIA's forecast of a surplus of gas supply turn out to be too bullish. < This is likely IMHO
3. HOT summer increases demand from gas fired power plants.